10-009926PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Victor Jesus Monzon Status: Closed Recommended Order on Tuesday, June 7, 2011.

Summary: Appraiser is not guilty of the alleged misconduct.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE , )

)

Petitioner, )

) Case Nos. 10 - 9 926PL

vs. )

)

VICTOR JESUS MONZON , )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on March 9, 2011 , by video - teleconference between Miami and

Tallahassee, Florida, before Administrative Law Judge Claude B.

Arrington of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Donna Christine Lindamood, Esquire

D epartment of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801 - 1757

For Respondent: Daniel Villazon, Esquire

Da niel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

STATEMENT OF THE ISSUE

Whether Victor Jesus Monzon (Respondent) committed the

violations alleged in the subject Administrative Complaint, and,

if so, the penalties that should be imposed.

PRELIMINARY STATEMENT

Respondent is a real estate appraiser. On July 20, 2010,

the Department of Business and Professional Regula tion, Division

of Real Estate (Petitioner) filed the subject Administrative

Complaint containing factual allegations as to an appraisal

report (the Report) of condominium unit 1803 located at 1331

Brickell Bay Drive, Miami, Florida (the S ubject P roperty) as of

April 23, 2007. In addition to the statutory references, t he

Administrative Complaint cited certain Uniform Standards of

Professional Appraisal Practice (USPAP).

Count One of the Administrative Complaint charged that

Respondent " violated section 475 .624(2), Florida Statutes (2007)

by culpable negligence or breach of trust in a business

transaction; or has violated a duty imposed upon Respondent by

the terms of a contract, whether written, oral, express or

implied, in an appraisal assignment, by certi fying Respondent

complied with the above USPAP Standards when he did not.

Count Two alleged that Respondent "engaged in fraud,

misrepresentation, concealment, or dishonest conduct by

concealing prior sales of the Subject Property; concealing or

misrepresen ting the true ownership of the Subject Property;

acquiescing in the client's demand to conceal the true ownership

of the Subject Property and to alter the [appraisal report] to

reflect a 'change' in ownership; used a Comparable Sale 1 that

sold under circu mstances suggestive of fraud to arrive at a

higher valuation for the Subject Property; using other

Comparable Sales located in a development noted for fraud, in

violation of section 475.624(2). "

Count Three alleged that Respondent violated section

475.624 (15) by failing to "practice appraisal practice with that

level of care and skill which is recognized by a reasonably

prudent appraiser as being acceptable under similar conditions

and circumstances by failing to comply with the USPAP provisions

governing the development and communication of the [ R eport]."

The final count of the Administrative Complaint, Count

Four, was dismissed by Petitioner at the outset of the formal

hearing.

Respondent timely requested a formal administrative hearing

the matter was ref erred to DOAH , and this proceeding followed .

At the formal hearing, Petitioner presented the testimony

of Arthur Soule (a n investigator e mployed by Petitioner) and

Phillip G. Spool (an appraiser). Petitioner offered eight

sequentially - numbered exhibits, e ach of which was admitted into

evidence. Respondent testified, but offered no other testimony

and no exhibits.

The Transcript, consisting of two volume s , was filed

April 4 , 2011. Both parties timely filed P roposed R ecommended

O rders, which have been duly considered by the undersigned in

the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times relevant to this proceeding, Respondent

has been a state certified residential real estate appraiser,

having been issued license RD - 4245 on January 3, 2004.

2. Respondent's licensure has not been previously

disciplined by Petitioner.

3. Respondent's business is named Heartland Appraisal

Group , Inc.

4 . Respondent is subject to the regulatory jurisdiction of

the Florida Real Esta te Appraisal Board (Board) by o peration of

chapters 455 and 475, Florida Statutes (2010).

5. Petitioner has jurisdiction over disciplinary

proceedings for the Board. Petitioner is authorized to

prosecute administrative complaints by operation of chapters 455

and 475 , Florida Statutes.

6. On April 23, 2007, Respondent developed the Report on

the S ubject P roperty , which is a condominium unit located in a

condominium complex known as the Jade Residences .

7. Respondent prepared the Report fo r his client, Infinity

Mortg age (Infinity).

8. The Administrative Complaint was prepared in response

to a complaint from J. P. Morgan Chase , also known as Chase Home

Finance (Chase) . No representative of Infinity or Chase

testified at the formal hearing, so no finding has been made as

to how Chase came to possess or utilize the Report. There is

also no finding made as to whether Infinity or Chase was misled

by any iteration of the Report.

9. Respondent's work file contains a copy of a contract

between "John Michael Pla" as seller and "Jeannette H. Lee

Declaration of Trust Dated 9/25/98" as purchaser for the sale of

the Subject Property in the amount of $1,307,500 (the contract

price).

10 . In addition to the iteration of the Report that

Petitioner received from Chase, Petitioner introduced four

iterations of the Report as part of its E xhibit 1 that w ere

copied from Respondent's work file . What was thought to be a

fifth iteration obtained from Respondent's work file was also

part of Petitioner's Exhibit 1 , but it was la ter determined to

be a duplicate of one of the other iterations. For ease of

reference, the f ive iterations will be referred to by the letter

I followed by a hyphen and its assigned number .

11 . Pages 18 - 40 of Petitioner's Exhibit 1 constitute the

iterati on of the Report Petitioner's investigato r obtained from

Chase (I - 1) .

12. Respondent's work file did not have a copy of I - 1.

13 . Page 20 of I - 1 contains a photocopy of Respondent's

handwrit ten notation: "Original 1." The handwritten notation

does not appear on any of the other iterations.

14 . Pages 21 1 - 234 of Petitioner's Exhibit 1 constitute I -

2 ., p ages 236 - 259 constitute I - 3 , p ages 26 1 - 284 constitute I - 4 ,

and pages 311 - 335 constitute I - 5 .

15. All f ive iterations of the R eport were signed by

Respondent. I - 1 was signed April 24, 2007; I - 2 , I - 4 , and I - 5

were signed on April 25, 2007; and I - 3 was signed on July 25,

2007. All f ive iterations were effective as of April 23, 2007.

16. All f ive iterations of the Report valued the Subject

Property at $1,400,000. There was no evidence that the Report

overstated the value of the Subject Property.

17 . There are two separate page s for I - 1 marked "page

one." On the I - 1 page one with the handwritten notation , the

name of the borrower is Jean n ette Lee and the name of the owner

of public record is John Pla . This same information is found on

the page ones of I - 2 and I - 3.

18 . On the page one of I - 1 without the handwritten

notation, the name of the borrower is " LEE, " and the nam e of the

owner of record is "Wells Fargo Bank NA" (Wells Fargo) .

19 . On the page one of I - 4 and I - 5, the name of the owner

of record is Wells Fargo and the name of the borrower is

Jeannette Lee .

20. The contract price listed on all iterations except I - 1

is $1,307 ,500 . On both pages marked "one" on I - 1, the contract

price is listed as being $1,307,500 in one place and $1 , 37 0 ,500

in another place.

21 . In the "Comparable Sale" section of the reports, the

unit number for comparable sale 3 is not listed for I - 1 or I - 5 .

The unit number for comparable sale 3 is listed for the other

iterations.

22 . Also in the Comparable Sale sectio n of the reports, I -

1 reflects the contract price for the subject property as being

$1,370,500. In the same place on the other it erations , the

contracted sales price is listed as being $1,307,500. Stating

the contracted sales price for the subject property at $63,000

more than the actual contracted sales price was a mistake.

There was insufficient evidence to establish that it was a

deliberate mistake. There is nothing in the record to suggest

that the mistake was anything other than a typographical error

that Respondent subsequently caught and cor rected . Petitioner

failed to prove that the error had any effect on the appraised

value Respondent put on the subject property.

23. FARES is a software program which stands for "First

American Real Estate Solutions." It is acceptable practice for

an app raiser to use FARES in determining the ownership of

property. Utilizing FARES, Respondent determined that the owner

of the subject property was Wells Fargo. A Multiple Listing

Service (MLS) entry reflected an unknown closed sale of the

subject property w ith a sales price of $1,133,00 0 .

24. Respondent advised Infinity of the conflict, and he

advised that he was using FARES instead of the MLS listing

because he believed that FARES was more reliable.

25. The copy of the sales contract in Respondent's work

file reflected that the seller was JJohn (sic) Michael Pla.

26. On March 8, 2007, Wells Fargo deeded the subject

property to John Pla. This deed was recorded on April 14, 2007.

The FARES search done by Respondent did not reveal the deed.

The likely explanation for that failure is the delay in indexing

public records in Dade County.

27. After Respondent was able to verify this sale, he

changed the name of the owner of the subject property on his

Report and reflected the date of sale and the sales price of

$1,133,000 .

28. I - 1 and I - 5 do not reflect a sale of the Subject

Property in September 2004 for the amount of $860,000.

Petitioner's expert agreed that that failure had no effect on

the appraised val ue of the Subject Property in April 2007.

29. I - 2 and I - 3 reflect that Pla was the owner and they

reflected the $860,000 sale of the Subject Property in September

2004 and the sale of the property to Pla in 2007. On July 5,

2007, Infinity requested that Respondent change the name of the

owner from Wells Fargo to Pla and provided Respondent with a

copy of the deed from Wells Fargo to Pla. I - 3, signed by

Respondent on July 5, 2005, was prepared in response to that

request. The record is unclear how I - 2, s igned on April 25,

2007, had that updated information.

30. After I - 3 was issued, the owner of record, the amount

of the contract, and the sales history of the property were

correctly stated.

31. Respondent used four comparable sales in determining

the value of the subject property. Respondent used a computer

program to search for comparable sales that were similar in

square footage, distance from the subject property, and time of

sale. The use of the computer program and the parameters he

used in sele cting the comparable sales were reasonable.

32. Petitioner asserted that Respondent erred in using

comparable sale 1 because the use of that comparable inflated

the price of the subject property. There was insufficient

evidence to establish that comparab le sale 1 was a fraudulent

transaction or that Respondent erroneously relied on comparable

sale 1 in determining the value of the subject property.

Comparable sale 1 was another unit in the Jades Residences

condominium complex that was on a higher floor t han the Subject

Property. Respondent made an adjustment to the sales price for

comparable sale 1 to reflect the differences between the two

units. There was insufficient evidence to establish that the

adjustment was inappropriate. Further, Respondent us ed a

weighted average which gave less consideration to comparable

sale 1 than to the other comparables used.

33. Respondent testified, credibly, that he sent two

iterations of the Report to Infinity. The first report listed

Wells Fargo as the owner and did not list the September 2004

sale of the property or the sale of the property to Pla in March

2007. That appear s to be I - 5, which was signed April 25, 2007.

The other iteration was I - 3, which was signed July 5, 2007.

34. Petitioner's expert agreed that it was reasonable for

Respondent to amend his Report in July 2007 after he learned of

the September 2004 sale an d after he verified the sale from

Wells Fargo to Pla .

35. The Jade Residences condominium complex became

notorious for mortgage fraud in the latter part of 2007. There

was no evidence that Respondent was aware of that mortgage fraud

when he prepared his original Report in April 2007 or when he

amended his original Report in July 2007.

36. Respondent signed the Report which included the

following representation:

I performed this appraisal in accordance

with the requirements of the Uniform

Standard of Prof essional Appraisal Practice

that were accepted and promulgated by the

Appraisal Standards Board of the Appraisal

Foundation and that were in place at the

time this appraisal report was prepared.

37. Appraisers are not required b y state law to comply

with USPAP standards, but it is the industry practice to do so.

CONCLUSIONS OF LAW

38 . DOAH has jurisdiction over the subject matter of and

the parties to this proceeding pursuant to Sections 120.569 and

120.57(1), Florida Statutes (2010) .

39 . Petitioner ha s the burden of proving by clear and

convincing evidence the allegations against Respondent. See

Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987); Evans Packing

Co. v. Dep't of Agric. & Consumer Servs. , 550 So. 2d 112 (Fla.

1st DCA 1989); and Inquiry Conc erning a Judge , 645 So. 2d 398

(Fla. 1994). The following statement has been repeatedly cited

in discussions of the clear and convincing evidence standard:

Clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify

must be distinctly remembered; the evidence

must be precise and explicit and the

witnesses must be lacking in confusion as to

the facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact the firm belief of (sic)

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983).

40. Section 475.624, Florida Statutes (2007) provided, in

relevant p art, as follows:

Discipline. -- The board may deny an

application for registration or

certification; may investigate the actions

of any appraiser registered, licensed, or

certified under this part; may reprimand or

impose an administrative fine not to exceed

$5,000 for each count or separate offense

against any such appraiser; and may revoke

or suspend, for a period not to exceed 10

years, the registration, license, or

certification of any such appraiser, or

place any such appraiser on probation, if it

finds that the registered trainee, licensee,

or certificateholder:

* * *

(2) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest

conduct, culpable negligence, or breach of

trust in any business transaction in this

state or any other state, nation, or

territory; has violated a du ty imposed upon

her or him by law or by the terms of a

contract, whether written, oral, express, or

implied, in an appraisal assignment; has

aided, assisted, or conspired with any other

person engaged in any such misconduct and in

furtherance thereof; or h as formed an

intent, design, or scheme to engage in such

misconduct and committed an overt act in

furtherance of such intent, design, or

scheme. It is immaterial to the guilt of

the registered trainee, licensee, or

certificateholder that the victim or

int ended victim of the misconduct has

sustained no damage or loss; that the damage

or loss has been settled and paid after

discovery of the misconduct; or that such

victim or intended victim was a customer or

a person in confidential relation with the

registe red trainee, licensee, or

certificateholder, or was an identified

member of the general public.

* * *

(15) Has failed or refused to exercise

reasonable diligence in developing an

appraisal or preparing an appraisal report.

41. Count One of the Adm inistrative complaint alleged that

Respondent violated section 475.624 (2), Florida Statutes by

certifying that he had complied with USPAP standards when he did

not. Adherence to USPAP standard 1 - 5 would have required

Respondent to analyze all sales of the subject property that

occurred within the three years prior to the effective date of

the appraisal. The iteration of the Report Respondent sent to

Infinity did not include the September 2004 sale in the amount

of $860,000 or the March 2007 sale of the pr operty to Pla.

Respondent testified, credibly, that he considered the September

2004 sale but not reference the sale because he mistakenly

thought it was without the three - year period and because he did

not think the 2004 sale had any bearing on the 2007 appraisal.

While Respondent admitted that he should have included the 2004

sale in his first report to Infinity , b oth Mr. Spool and

Respondent testified that the 2004 sale had no bearing on the

appraised value. That deviation from USPAP standard 1 - 5 does

not rise to the level of misconduct contemplated by section

475.624(2), Florida Statutes. Respondent's inability to access

the Wells Fargo to Pla deed in April 2007 explains the absence

of that sale in the first Report Respondent sent to Infinity.

42. P etitioner failed to establish that Respondent

otherwise violated USPAP standards or that he violated section

475.624(2), Florida Statutes , as alleged in both Counts One and

Two.

43. Petitioner failed to establish that Respondent

violated section 475.624(1 5), Florida Statutes, as alleged in

Count Three.

44 . Petitioner has failed to meet its burden in this

proceeding.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Business and

Professional Regulation, Division of Real Estate enter a final

order finding Respondent not guilty of the violations alleged in

the Administrative Complaint.

DONE AND ENTERED this 7 th day of June , 2011, in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Admini strative Hearings

this 7 th day of June , 2011.

COPIES FURNISHED :

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

400 West Robinson Street, N801

Orlando, Florida 32801

Layne Smith, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Donna Christine Lindamood, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801 - 1757

Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.